Over the last few months of the pandemic, our federal and state governments have passed laws to provide for economic and mortgage relief due to COVID-19. More legislation is pending in the House to provide further protections. We are here to keep you updated on past developments and to watch what is happening in our government currently to protect our market. M1 Capital Corp in White Plains, NY is your source to follow legislation in the real estate market during the COVID-19 pandemic.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act

The CARES Act was passed into law in late March and provides protection so that mortgage holders with federally backed loans can go into forbearance plans. If you took advantage, that means you should not incur any penalties or fees, but interest could accrue. In addition, the law passed a foreclosure moratorium. It also contained individual stimulus payments.

CARES Act was mainly useful for homeowners with Fannie Mae and Freddie Mac backed mortgages, such as FHA Loans. The forbearance should not impact your credit score, but if you did use it, it could reflect in future applications for mortgages. CARES Act also provided some relief for loan servicers who are impacted by the loss in payments.

The Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act

The HEROES Act was passed into the House Senate in May and is currently making its way through the House committees. If passed, it will contain $3 billion in economic relief and stimulus funds. It contains another round of individual stimulus, loans for businesses, extends mortgage and rent relief, and sends further aid to states among other things.

The mortgage relief is targeted to help families and individuals who may be in default and are at risk losing their home after forbearance and other programs end. Funds would flow through local housing agencies and will apply towards both privately backed and federal backed loans. However, most of the aid will target homeowners making 80% or less of the county’s Area Median Income (AMI). Relief would be allocated to states based on their respective unemployment rates.

Additional Mortgage Forbearance

The HEROES Act is important to watch if you have taken advantage of any deferrals during the COVID-19 pandemic.  It extends forbearance to both private and federally backed mortgages. Homeowners that have missed two or more of their payments since March will be granted a 60-day extension of their loan obligations. Forbearance may also run for 120 days to up to 12 months if proof of COVID-19-related hardship can be provided.

M1 Capital Corp is available to answer any questions about mortgage relief and identify ways to restructure your mortgage in response. If you have additional questions, contact our team in White Plains, NY.

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